Scoville loses control of Traffic Monsoon, Receiver appointed
Contradicting Charles Scoville’s insistance that he’s negotiating directly with the SEC and that everything is fine, yesterday the regulator filed an ex-parte motion requesting the appointment of a Receiver.
The SEC’s motion, filed on July 27th, reaffirms the regulator’s stance that Traffic Monsoon is a Ponzi scheme.
Traffic Monsoon has operated as an internet-based Ponzi scheme that has raised over $200 million from over 160,000 investors throughout the world.
Currently, Traffic Monsoon has approximately $60 million in accounts located in the United States, Canada, and the United Kingdom.
It has offices in Salt Lake City, Utah, and in London, England, presumably where financial and other business records are held.
Moreover, it runs a website (trafficmonsoon.com) through which hundreds of thousands of individuals around the world invest their funds.
The website is reportedly operated through servers located in North Carolina.
The Commission respectfully requests that the Court enter an ex parte order appointing a receiver in this action to protect and preserve these assets.
As it stands, Traffic Monsoon and Charles Scoville are prohibited from soliciting new investment from Traffic Monsoon affiliates and dispersing any personal property they own.
In order to ensure that all assets of the Defendants are properly preserved, and to give effect to the terms and provisions of the TRO, including but not limited to the cessation of investor solicitation through the Traffic Monsoon website and the protection of the servers, business records, and files of Traffic Monsoon and Scoville, the Commission respectfully requests that the Court appoint a Mary Margaret (Peggy) Hunt of Dorsey Whitney LLP as the Receiver over all assets of Traffic Monsoon and Charles Scoville.
The same day the SEC filed their motion, Judge Parrish granted it.
Before the Court is an Ex Parte Motion for Appointment of Receiver brought by the Securities and Exchange Commission.
Having considered the Commission’s Motion, the Court makes the following findings:
The Commission has made a sufficient and proper showing that the appointment of a receiver in this action is necessary and appropriate for the purposes of marshaling and preserving all assets of Traffic Monsoon, LLC and all assets of Charles D. Scoville.
Judge Parrish also acknowledged that if a Receivership was not established, that Traffic Monsoon and Scoville
would likely dissipate or otherwise conceal assets and would likely continue to receive funds from investors.
Because Traffic Monsoon and Scoville are unlikely to have sufficient assets to satisfy the full value of any judgment obtained in this case, any dissipation of the assets would irreparably harm the investors on whose behalf the Commission brought this suit.
That last paragraph is significant, revealing that the Judge anticipates significant damages to be awareded against Traffic Monsoon and Scoville at a later date.
Mary Hunt has been appointed Receiver of Traffic Monsoon, with the appointment seeing the Receivership take full control of Traffic Monsoon and Scoville’s assets.
The Receiver is authorized to take immediate possession of all assets, bank accounts or other financial accounts, books and records and all other documents or instruments relating to Traffic Monsoon and Charles Scoville.
The Receiver is authorized to take immediate possession of all personal property of Traffic Monsoon and Charles Scoville, wherever located, including but not limited to electronically stored information, computers, laptops, hard drives, servers, external storage drives, and any other such memory, media or electronic storage devices, books, papers, data processing records, evidence of indebtedness, bank records and accounts, savings records and accounts, brokerage records and accounts, certificates of deposit, stocks, bonds, debentures, and other securities and investments, contracts, mortgages, furniture, office supplies and equipment.
The Receiver is authorized to take immediate possession of all real property of Traffic Monsoon and Charles Scoville, wherever located.
The Receiver is (also) authorized to open all mail directed to or received by or at the offices or post office boxes of Traffic Monsoon and Charles Scoville, and to inspect all mail opened prior to the entry of this Order, to determine whether items or information therein fall within the mandates of this Order.
Traffic Monsoon and Scoville have additionally been ordered to
- immediately preserve and turn over to the Receiver forthwith all paper and electronic information of, and/or relating to Traffic Monsoon; such information shall include but not be limited to books, records, documents, accounts and all other instruments and papers
- provide any passwords and execute any documents required to access any computer or electronic files in any medium, including but not limited to electronically stored information stored, hosted or otherwise maintained by an electronic data host
- provide any information to the Receiver that the Receiver deems necessary to exercising the authority and discharging the responsibilities of the Receiver under this Order, including but not limited to allowing the Receiver to inspect documents and assets and to partition office space and
- assist the Receiver in fulfilling her duties and obligations (by responding) promptly and truthfully to all requests for information and documents from the Receiver
In a nutshell, Charles Scoville just lost control of Traffic Monsoon.
A preliminary injunction hearing remains scheduled for August 5th. Stay tuned…